HMRC has been consulting on a number of consultations on 'Making Tax Digital' which will make it mandatory for the self-employed to keep records digitally and to report more frequently from 2018.
The NFU has sought members’ views and concerns and used the large number of responses received to inform our formal consultation responses.
We will continue to seek changes to HMRCs proposals over the coming months.
NFU members can read our full submissions to the consultations in the ‘related documents’ section at the bottom of this page.
The government’s plans for Making Tax Digital are radical, far reaching, and ambitious. They include a number of different areas and the consultations reflect this. They cover:
- how digital record keeping and regular updates will operate;
- options to simplify tax for unincorporated businesses, including how the self-employed map accounting periods onto the tax year, extending cash basis accounting and reducing reporting requirements for unincorporated businesses;
- extending cash basis accounting to unincorporated property businesses, making life simpler for landlords;
- how the voluntary pay-as-you-go arrangements announced at this year’s Budget will work.
What has the NFU been doing?
During the last year the NFU has regularly attended HMRC digital stakeholder groups to discuss the proposed new obligations and our concerns over rural broadband infrastructure, additional costs and increased administrative burden. Many of the suggested benefits such as predicting your tax liability do not seem realistic for a farming business. We have also organised farm visits for HMRC senior officials to discuss their proposals.
We asked members for their views and concerns on these proposals and were pleased to receive so many responses. We have tried to capture as many views and concerns as possible in our formal consultation responses.
While there was some acknowledgement from HMRC in their consultations of digital exclusion and the cost of implementation we feel these have been underestimated.
We also believe HMRC has failed to make a convincing case that these reforms will benefit businesses. In addition we feel insufficient attention has been given to more complex unincorporated businesses. Farms are a clear example of this with special tax and accounting rules; they may also be vat registered; be partnerships; have multiple income streams; and are unlikely to use the cash reporting basis meaning a significant number of accounting adjustments will be made solely at year end.
How members can help further
The NFU is urging members to continue to contact us with views and concerns and provide us with evidence of how these proposals will affect your business. You can email us here. We would also encourage members to raise their concerns with their MPs.